Have you ever stopped to think what happens to your used vehicle once you trade it in to a dealer? I’ve envisioned some eager if impecunious local young person, delighted to own my older but well-cared-for vehicle. Actually, though, that’s a largely self-serving illusion of mine, and a new report out of the UN sets me (and possibly you) straight. Resales abroad between 2015 and 2018, in fact, contributed 14 million used light-duty vehicles to worldwide exports.
The UN argues that this trade needs to be supervised and that regulation is essential to ensure the quality of the vehicles and reduce urban air pollution and global climate emissions. A large share of these used vehicles lack basic environmental requirements.
In the spring of 2020, with the covid-19 pandemic forcing people around the world to self-quarantine, commuting nearly halted. With almost everyone sitting at home and tens of millions of people losing their jobs, used automobile sales in the US were reportedly down 64% in the last week of March. However, the export trade of used vehicles continued.
Millions of used cars, vans, and minibuses exported from Europe, the US, and Japan to low- and middle-income countries are hindering efforts to combat the climate crisis. They are contributing to air pollution and are often involved in road accidents. Many of them are of poor quality and would fail road-worthiness tests in the exporting countries.
This information emerges from a United Nations Environment Program (UNEP) report. It looks at 146 countries that import used vehicles and calls for action to regulate the trade through the adoption of a set of harmonized minimum quality standards. These would ensure used vehicles contribute to cleaner and safer fleets in recipient countries.
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Globally, the transport sector is responsible for nearly 1/4 of energy-related global greenhouse gas emissions. Specifically, vehicle emissions are a significant source of the fine particulate matter (PM2.5) and nitrogen oxides (NOx) that are major causes of urban air pollution.
The report makes the following key findings about used vehicles and their resales abroad:
- The global fleet of light duty vehicles (LDVs) is set to at least double by 2050. Some 90% of this growth will take place in non-OECD countries which import a large number of used vehicles. Despite the critical role they play in road accidents, air pollution, and efforts to mitigate the climate crisis, there are currently no regional or global agreements on the trade and flow in used vehicles.
- The 3 largest exporters of used vehicles, the European Union (EU), Japan, and the US, exported 14 million used light duty vehicles (LDVs) worldwide between 2015 and 2018. The EU was the largest exporter with 54% t of the total, followed by Japan (27%), and the US (18%).
- The major destinations for used vehicles from the EU are West and North Africa; Japan exports mainly to Asia and East and Southern Africa; and, the US directs its used vehicles mainly to the Middle East and Central America.
- 70% of exported LDVs head to developing countries. Africa imported the largest number (40%), followed by Eastern Europe (24%), Asia-Pacific (15%), the Middle East (12%), and Latin America (9%).
Key concerns are:
- pollutant and climate emissions of used vehicles
- the quality and safety of used vehicles
- energy consumption
- the costs to operate used vehicles.
Inger Andersen, executive director of UNEP, stated:
“Cleaning up the global vehicle fleet is a priority to meet global and local air quality and climate targets. Over the years, developed countries have increasingly exported their used vehicles to developing countries. Because this largely happens unregulated, this has become the export of polluting vehicles. The lack of effective standards and regulation is resulting in the dumping of old, polluting, and unsafe vehicles. Developed countries must stop exporting vehicles that fail environment and safety inspections and are no longer considered roadworthy in their own countries, while importing countries should introduce stronger quality standards.”
A Case Study about Negative Effects of Used Vehicles & Resales Abroad
Through its ports, the Netherlands is one of the exporters of used European vehicles. When the UNEP examined the Netherlands’ resales abroad, it determined that, as a general rule, the Netherlands did not have a valid roadworthiness certificate at the time of export. Most vehicles were between 16 and 20 years old, and most fell below EURO4 European Union vehicle emission standards. For example, the average age of used vehicles exported to the Gambia was close to 19 years old, while 1/4 of used vehicles exported to Nigeria were almost 20 years old. The cars had more than 125,000 miles on their odometers on average, and many were missing catalytic converters that reduce toxic gases from exhaust.
Stientje Van Veldhoven, The Netherlands Minister for the Environment, acknowledged:
“These results show that urgent action needs to be taken to improve the quality of used vehicles exported from Europe. The Netherlands cannot address this issue alone. Therefore, I will call for a coordinated European approach and a close cooperation between European and African governments to ensure that the EU only exports vehicles that are fit for purpose and compliant with standards set by importing countries.”
Poor quality used vehicles also lead to more road accidents. Many countries with weak used vehicles regulations, including Malawi, Nigeria, Zimbabwe, and Burundi, also have very high road traffic death rates.
There is Also Some Good News about Used Vehicle Exports
But there is some good news, too. Countries that have implemented measures to govern the import of used vehicles – notably age and emissions standards – attract higher-quality used vehicles, including hybrid and electric cars, at affordable prices. For example, Morocco only permits the import of vehicles less than 5 years old and those meeting the EURO4 European vehicles emission standard; as a result, it receives only relatively advanced and clean used vehicles from Europe.
UNEP, with the support of the UN Road Safety Trust Fund and others, is part of a new initiative supporting the introduction of minimum used vehicles standards. The initiative’s first focus will be countries on the African continent; a number of African countries have already put in place minimum quality standards – including Morocco, Algeria, Côte d’Ivoire, Ghana, and Mauritius – with many more showing interest in joining the initiative.
Fiscal instruments can also be an effective means to regulate the import of used vehicles. Examples are age-based taxation, progressive excise tax based on CO2 emissions or engine size, and exemptions for specific vehicles, such as hybrid electric and electric vehicles. Last month, the Economic Community of West African States (ECOWAS) set cleaner fuels and vehicle standards from January, 2021 forward. ECOWAS members also encouraged the introduction of age limits for used vehicles. Countries like these that introduce used vehicles regulations see safer fleets and fewer accidents.
Other research points to some positive effects about used vehicle exports. In the Review of International Economics, researchers determined that the US, with its strict environmental regulations, has a motive to export used vehicles to Mexico, which impacts air pollution emissions from vehicle driving in Mexico. Using data on the import and registration of vehicles in Mexico after NAFTA, they founds that Mexico’s used vehicle imports reduce pollution emissions generated from vehicles, mainly because of the “technique effect” — model–age‐comparable vehicles imported from the US emit less than those originally operated in Mexico.
Final Thoughts about Used Vehicles & Resales Abroad
At home and abroad, used vehicles have a significant impact on air pollution. A 2019 study in Italy determined that technological obsolescence, by causing an increasing environmental impact, increases the local expenditure for the protection of the environment.
Air pollution contributes to increased morbidity — especially at respiratory and cardiovascular levels — as well as premature mortality and cancer. We’re at a place where technology can do amazing things to ameliorate pollution. New technologies can measure traffic-related air pollution (TRAP) at an unprecedented spatial resolution. Monitoring and control systems can begin to bring pollutants under control. Consequently, efficient mitigation strategies need to be implemented for substantial environmental and health co-benefits, especially with used vehicles and their exports abroad.
Kwabena Frimpong-Boateng, Ghana’s minister for environment, science, technology, & innovation, described the lessons learned about cleaner used cars.
“The impact of old polluting vehicles is clear. Air quality data in Accra confirms that transport is the main source of air pollution in our cities. This is why Ghana is prioritizing cleaner fuels and vehicle standards, as well as electric bus opportunities. Ghana was the first country in the West Africa region to shift to low sulphur fuels, and this month has imposed a 10-year age limit for used vehicle imports.”
UNEP — a leading global voice on the environment — is providing leadership to countries around the world in the hopes to encourage partnerships in caring for the environment by inspiring, informing, and enabling nations and peoples to improve their quality of life without compromising that of future generations. Addressing the quality of used vehicle resales abroad is only one of many steps they are taking to help mitigate the climate crisis.